The Impact of EPS & DPS on the stock price: Evidence from The Saudi Stock Exchange
Keywords:
Earning per share, Dividend per share, Stock price, Tadawul, Saudi Stock Exchange
Abstract
This paper intends to inspect the extent to which stock price [SP] is influenced by the volatility of earning per share [EPS] and dividends per share [DPS] of Saudi Stock Exchange listed companies [Tadawul], during 2015 – 2018. Multiple regression models were built to identify the influential role of [EPS] and [DPS] on [SP]. The outcome of the built models mirrors a significantly influential role of the two factors earning per share and dividend per share on the stock price during the period under consideration. Also, the models reveal that during the overall period under study earning per share has a dominant influence on stock price, contrary to the dividend per share which was dominant for only two years, suggesting investors’ tendency toward using earning per share as a predictor, rather than dividend per share when deciding on their options for investing in Tadawul listed companies stocks.
References
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11- Kai , Khoo De, Ismail Bin Abd Rahman(2018): The Impact of Financial Indicators towards Stock Returns of Finance Companies Listed on Bursa Malaysia , International Journal of Academic Research in Accounting, Finance and Management Sciences 8 (3),pp 128-140.
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19- Nalurita, Febria (2016): Impact of EPS on Market Prices and Market Ratio, Business and Entrepreneurial Review, Vol.15, No.2, pp. 111 – 130.
20-Inyiama, Oliver Ike (2015): Does Earning Per Share Determine Market Price of Ordinary Shares? Evidence from Nigeria Banking Sector (2000 –2013), European Journal of Accounting Auditing and Finance Research, Vol.3, No.6, pp.91-102.
21- Serife, Ozlen (2014): The Effect of Company Fundamentals on Stock Values, European Researcher, Vol 71, No 3-2, pp.595-602.
22-Ghimire, Ramesh Raj and Mishra, Deepashree (2018): Determinants of Stock Price in Nepalese Market, The International Research Journal of Management Science, Vol 3 No 1, pp123-135.
23- Garba, Abdulkarim(2014): Impact of Dividend- Per- Share on Common Stock Returns: A Case Study of Some Selected Manufacturing Firms Listed on the Nigerian Stock Exchange, European Journal of Business and Management , Vol.6, No.30,pp 36 -42.
24-Matthew, Ordu Monday, Innocent,Enekwe, Chinedu and Mike, Anyanwaokoro (2104): Effect of Dividend Payment on the Market Price of Shares: A Study of Quoted Firms in Nigeria, Journal of Economics and Finance, Vol 5, Issue 4, PP 49-62.
2- Alawneh, Ateyah (2018): Dividends, Net Income after Taxes and Earnings per Share and Their Impact on the Market Capitalization of Listed Companies Amman Stock Exchange during the Period 1978-2016 ,International Journal of Economics and Finance; Vol. 10, No. 10; pp69 -84.
3-Velankar, Nandan, Chandani, Ankita, and Ahuja, Amanpreet Kaur(2017): Impact Of EPS And DPS On Stock Price: A Study Of Selected Public Sector Banks Of India ,Prestige International Journal of Management & IT-Sanchayan, Vol. 6(1), pp. 111-121.
4-Jain, Neha , and Bajaj , Kanchan (2017): Impact of Earnings per Share on Market Price of Share with Special Reference to Selected Companies Listed on NSE , International Journal of Engineering and Management Research, Volume-7, Issue-3,,pp1-9.
5-Majanga, Byson B.(2015): The Dividend Effect on Stock Price-An Empirical Analysis of Malawi Listed Companies, Accounting and Finance Research, Vol. 4, No. 3; 2015,pp15-99.
6-Adebisi, O. S., & Lawal, K. O. (2015). Equity Share Price Determinants: A Survey of literature. Arabian, Journal of Business and Management Review (Oman Chapter), 5(3), p38.
7-Islam, Md. Rashidul, Khan , Tahsan Rahman , Choudhury, Tonmoy Toufic , and Adnan Ashique Mahmood (2014): How Earning Per Share (EPS) Effects on Share Price and Firm Value , European Journal of Business and Management , Vol.6, No.17,pp 97-108.
8-Hemadivya, K., and Devi, V Rama (2013): A Study on Relationship between Market Price and Earnings per Share with Reference to Selected Companies, International Journal of Marketing, Financial Services & Management Research, Vol.2, No. 9, pp126-133.
9-Almumani, Mohammad Abdelkarim (2014): Determinants of Equity Share Prices of the Listed Banks in Amman Stock Exchange: Quantitative Approach, International Journal of Business and Social Science, Vol. 5 No. 1, pp 91 -104.
10-Ebrahimi, Mohammad and Chadegani, Arezoo Aghaei (2011): The Relationship Between Earning, Dividend, Stock Price and Stock Return: Evidence from Iranian Companies, International Conference on Humanities, Society and Culture, IPEDR Vol.20, PP 318-323.
11- Kai , Khoo De, Ismail Bin Abd Rahman(2018): The Impact of Financial Indicators towards Stock Returns of Finance Companies Listed on Bursa Malaysia , International Journal of Academic Research in Accounting, Finance and Management Sciences 8 (3),pp 128-140.
12-Enow ,Samuel Tabot, and Brijlal, Pradeep (2016): Determinants of Share Prices: The Case of Listed Firms on Johannesburg Stock Exchange , Journal of Accounting and Management , Vol. 6, no. 1,pp85 -92.
13-Firasana, M.I (2012): Impact of Earning per Share and Dividend per Share on Share Prices: A Study on Selected Listed Companies in Colombo Stock Exchange, A Dissertation Submitted to the Faculty of Management and Commerce, South Eastern University of Sri Lanka.
14-Kalama, Daye Jacob (2009): The Relationship Between Earnings and Share Prices of Firms listed at the Nairobi Securities Exchange, Master Thesis in Business Administration, School of Business, University of Nairobi.
15- Utami, M., & Darmawan, A. (2019). Effect of DER, ROA, ROE, EPS and MVA on Stock Prices in Sharia Indonesian Stock Index, Journal of Applied Accounting and Taxation, 4(1), pp.15-22.
16- Rosikah, Prananingrum, Dwi Kartika, Muthalib, Dzulfikri, Azis , Azis,Muh, Irfandy , and Rohansyah, Miswar (2018): Effects of Return on Asset, Return on Equity, Earning Per Share on Corporate Value , The International Journal of Engineering and Science, Volume 7, Issue 3 , pp 6-14.
17-Laurens, Sebastianus (2018): Influence Analysis of DPS, EPS, and PBV toward Stock Price and Return, Journal the WINNERS, Vol. 19 No. 1, pp 21 - 29.
18 - Tache, Galgallo M (2016): The Effect of Earnings and Dividends on Share Prices of Firms Listed at the Nairobi Securities Exchange, A Research Project Submitted in Partial Fulfillment of the Requirements for the Award of the Degree of Master of Business. Administration, School of Business, University of Nairobi.
19- Nalurita, Febria (2016): Impact of EPS on Market Prices and Market Ratio, Business and Entrepreneurial Review, Vol.15, No.2, pp. 111 – 130.
20-Inyiama, Oliver Ike (2015): Does Earning Per Share Determine Market Price of Ordinary Shares? Evidence from Nigeria Banking Sector (2000 –2013), European Journal of Accounting Auditing and Finance Research, Vol.3, No.6, pp.91-102.
21- Serife, Ozlen (2014): The Effect of Company Fundamentals on Stock Values, European Researcher, Vol 71, No 3-2, pp.595-602.
22-Ghimire, Ramesh Raj and Mishra, Deepashree (2018): Determinants of Stock Price in Nepalese Market, The International Research Journal of Management Science, Vol 3 No 1, pp123-135.
23- Garba, Abdulkarim(2014): Impact of Dividend- Per- Share on Common Stock Returns: A Case Study of Some Selected Manufacturing Firms Listed on the Nigerian Stock Exchange, European Journal of Business and Management , Vol.6, No.30,pp 36 -42.
24-Matthew, Ordu Monday, Innocent,Enekwe, Chinedu and Mike, Anyanwaokoro (2104): Effect of Dividend Payment on the Market Price of Shares: A Study of Quoted Firms in Nigeria, Journal of Economics and Finance, Vol 5, Issue 4, PP 49-62.
Published
2021-06-03
How to Cite
O. Elsheikh , B. M., Allaoui , A., & Al sharmah , S. M. (2021). The Impact of EPS & DPS on the stock price: Evidence from The Saudi Stock Exchange. Journal of Excellence for Economics and Management Research, 5(1), 337-349. https://doi.org/10.34118/jeemr.v5i1.2047
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Original Article
